(Bloomberg) -- Chinese stocks rebounded in the afternoon following a report that a state institution bought exchange-traded funds, in what would be the latest policy effort to bolster markets. 

The CSI 300 Index closed down 0.4% after earlier falling more than 1%. The Shanghai Composite index ended in the green, bouncing back from a 0.6% slide that pushed it near the key 3,000-level that has in the past triggered intervention moves. 

The sudden upswing came after China Securities Journal reported an institution bought ETFs whose underlying assets are mostly A-shares issued by central state-owned enterprises. 

The news outlet didn’t name the institution. But after the markets closed, China Reform Holdings Corp. Ltd. said in a statement that one of its units bought an unspecified amount of an ETF tracking the Guoxin Central-SOEs Technology Lead Index. Turnover for the China Southern CSI Guoxin Central-SOEs Technology Lead ETF also surged to around 10 times the daily average over the past three months on Friday, according to Bloomberg-compiled data.

Stocks were sliding earlier as data showed the decline in China’s home sales accelerated in November. While a separate report showed an unexpected pickup in a private gauge of China’s manufacturing activity, it proved insufficient to assuage worries about the economy’s recovery. 

The reported buying of ETFs “would be a policy-driven move to prop up markets as investors stand on the sidelines and are hesitant to build positions toward the end of the year,” said Shen Meng, a director with Beijing-based Chanson & Co. Lifting the market in this manner “is unlikely to bring any long-term boost apart from this knee-jerk reaction,” he said.  

Authorities have taken steps to lift confidence and put a floor under sinking markets, including purchases of ETFs and bank stocks by the sovereign wealth fund. However, rebounds have rarely lasted more than a day, speaking to profound pessimism among foreign investors in particular. 

The afternoon report also drove other ETFs higher. China AMC CSI Central Enterprises Structure Adjustment ETF closed 0.5% higher, while China Universal CSI Guoxin Central-SOEs Shareholder Return ETF rose 0.8%. Bosera CSI Central-SOEs’ Innovation Driven ETF added 0.6%.

In Hong Kong, key gauges continued to slide. The Hang Seng China Enterprises Index fell 1.6%, while the Hang Seng Tech Index slumped more than 2%. 

The CSI 300 benchmark slid 2.1% in November, the worst performance among the world’s major equity benchmarks and missing out on a broad rally in global markets. Foreign investors sold nearly 5 billion yuan ($700 million) on a net basis Friday, following four straight months of outflows. 

(Updates fourth paragraph with China Reform’s purchase)

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